FX.co ★ Technical analysis of GBP/USD for May 9, 2016

Overview:

• The GBP/USD pair is trading around the area of 1.4414. Today, the level of 1.4414 represents a daily pivot point on the H1 time frame. The pair has already formed minor resistance at 1.1498, and strong resistance is seen at the level of 1.4537 because it represents weekly resistance 1. So, major resistance is seen at 1.4537, while immediate support is found at 1.4400. If the pair closes below the level of 1.4400, then the GBP/USD pair may resume it movement to 1.4306 to test weekly support 1. From this point, we expect the GBP/USD pair to move between the levels of 1.4456 and 1.4306. Equally important, the RSI is still calling for a strong bearish market as well as the current price is also below the moving average 100. As a result, sell below the price of 1.4456 with targets at 1.4360 and 1.4306 in order to form a double bottom. On the other hand, stop loss should always be taken into account, accordingly, it will be beneficial to set the stop loss above the last bullish wave at the level of 1.4550.

Comment:

• Volatility of last week: 623.84
• As a rule, the market is highly volatile if the last day had a huge volatility.
• Also it should be noted that the price will move between 1.4456-1.4500 and1.4300 in coming two days.